Stocks Wait For Jobs Report

Thursday, September 1, 2011
Stock Market Commentary:

Stocks were quiet on Thursday as investors digested the latest round of stronger than expected economic data. The major averages remain strong as they stubbornly hold on to their week-long gains of+8%. The major averages are technically in a new confirmed rally which means probing the long side may be prudent, if/when high ranked stocks begin to trigger fresh technical buy signals. Even with the latest FTD, the major averages are still trading below several key technical levels which means this rally may fade if the bears show up and quell the bulls’ efforts.

Jobless Claims Fall & ISM Beats Estimates:

Before Thursday’s open, the Labor Department said jobless claims fell -12,000 to a seasonally adjusted 409,000 last week. Elsewhere, the Institute for Supply Management said its manufacturing index slid to 50.6 in August which topped the boom bust level of 50 and topped the Street’s estimates for 48.5.

Market Outlook- Confirmed Rally!

The major averages confirmed their latest rally attempt on Tuesday, August 23, 2011 which was the 11th day of their latest rally attempt. It is important to note that all major rallies in history began with a FTD however not every FTD leads to a new rally (i.e. several FTDs fail). In addition, it is important to note that the major averages still are under pressure as they are all trading below their longer and shorter term moving averages (50 and 200 DMA lines) and are all still negative year-to-date. Our longstanding clients/readers know, we like to filter out the noise and focus on what matters most: market action. This rally will fail if/when August’s lows are breached. Until then, the bulls deserve the benefit of the doubt. If you are looking for specific help navigating this market, please contact us for more information.